ArcelorMittal Nippon Steel reports 50 per cent jump in earnings
ArcelorMittal Nippon Steel (AM/NS) India, formerly Essar Steel Ltd, has reported a 50 per cent jump in earnings for the second quarter of 2021 at $607 million (Rs 4,500 crore) compared with the preceding three months and a 450 per cent jump over the same period last year, demonstrating a strong demand and a widening margin.
The parent, ArcelorMittal, also posted its strongest quarter since 2008, reporting a 74 per cent spike in net income to $4 billion over the first quarter, backed by an all- round improvement in profitability across Europe, North America, CIS and Brazil. It had a net income of $2.28 billion in the first quarter and a loss of $559 million in the same period last year.
ArcelorMittal announced a decarbonisation programme that pledges to reduce carbon-dioxide by 25 per cent in the group and 35 per cent in Europe by 2030.
Arcelor Mittal will invest $10 billion to achieve this target.
AM/NS India focused on the buoyant export market during the June quarter like its peers as the country faced localised lockdowns. Steel shipment was nearly flat at 1.72 million tonnes (mt) in the second quarter compared with 1.7mt in January-March .
By the end of the second quarter, the business saw encouraging signs of domestic demand revival, particularly from the automotive, white goods and infrastructure sectors.
Earnings before interest, depreciation, tax and amortisation (EBIDTA) stood at $607 million compared with $403 million in the first quarter and $107 million in the same period of last year, which was severely affected by the nationwide lockdown.
Aditya Mittal, chairman of AM/NS India and CEO of AM, said, “AM/NS India’s progress in the 18 months since its inception is an excellent foundation to advance our plans to pursue both organic expansion and strategic opportunities in support of India’s growing economy.”
The joint venture plans to expand capacity to 30mt in the country, including immediately expanding the Hazira, Gujarat plant to 8.4mt from 7.3mt. AM/NS plans to expand capacity to 14mt in the medium- and 18mt in the long-term.
It has also signed an MoU with the Odisha government to set up a 12mt plant. At present, the company is expanding a pellet (an iron ore intermediary) plant in Odisha to 12mt allowing it to use low grade iron ore and reduce the cost of steel production.